IVA News

An IVA involves setting up a payment plan between the debtor and creditors. It must be arranged by a licensed insolvency practitioner who prepares a financial report for court proceedings. Provided 75 per cent of the value of the debt held by creditors who vote on the day accept the proposal, the IVA is legally binding, interest is frozen on the de... bts and as long as all the terms of the arrangement are met, the payments will be considered a full settlement of debts. But there are costs. First, there is a fee, typically around £1,500, paid to the insolvency practitioner for setting up the IVA, this will be taken out of the monthly payments made. Afterwards, commissions are taken out of the monthly payments as ongoing supervisory fees, which significantly reduce the amount being put towards the debt. The monthly payments may change, which could spell trouble if a change in circumstance rendered payments beyond reach, and, during an IVA, the debtor is unable to take out credit cards or loans. IVA providers used to have a tainted reputation for aggressive marketing to people for whom it is not appropriate. The Consumer Credit Counselling Service (CCCS), recommends IVAs in a mere 2 or 3 per cent of cases.Read More